A SECTION FOR ENTREPRENEURS: Worms turn a lost cause into a thriving business

A SECTION FOR ENTREPRENEURS: Worms turn a lost cause into a thriving business - Jessica and Richard Davies owned 950 acres of versatile farmland in Powys but couldn't make conventional husbandry pay. Salvation came with a lowly form of livestock. Michael

by MICHAEL WALE
Last Updated: 31 Aug 2010

Jessica and Richard Davies owned 950 acres of versatile farmland in Powys but couldn't make conventional husbandry pay. Salvation came with a lowly form of livestock. Michael Wale reports.

Even the best-laid plans of mice and men go oft astray. So said Robbie Burns, and the phrase now makes a regular appearance whenever events don't run to plan. What Burns didn't mention, and what all entrepreneurs should know, is that even the worst catastrophes can be remedied if you have a plan B up your sleeve.

The ideal plan B is one that isn't too far away from the original. It should enable you to use existing resources differently, so that with deft tweaks and a willingness to try something new, a loss-making business can be turned around.

It was just such an alternative that inspired Jessica and Richard Davies.

The couple ran a traditional Welsh farm set in 950 acres of idyllic countryside near the Shropshire border in Powys. The farm had been in the Davies family for generations, and Richard had been running it for several years.

The Davies had married in 1992. Richard was already working the family acres in Powys, Jessica was an insurance broker working in a Chelsea office.

'I came straight from that to the lambing shed,' she says. 'We met at a New Year's party in Snowdonia. Now life is never out of wellies.'

It seemed like the perfect business. The farm was made up of beef, sheep, arable and forestry land; a good combination with plenty of business opportunity.

Yet profits were on the wane, and the land was failing to earn the Davies a living. Says Jessica: 'What we had been getting for meat, wheat and sheep 20 years ago just fell through the floor. But the wages of our full-time staff kept increasing. In the end, the sums just didn't work out.'

The couple considered their options. They wanted to keep the farm but couldn't sustain it on its current footing. So in 1999 they made a momentous business decision - and turned to worms.

They let off their farmland for grazing and concentrated their energies on 25 acres devoted to worm farming. Richard used eight acres to breed worms for anglers. Jessica tried a more adventurous tack, pioneering waste disposal. She persuaded Powys County Council to back a pilot scheme that would use the Davies' worms to break down garden waste delivered by the Authority.

The decision to switch to worm farming wasn't immediate. The Davies had sat down almost daily for years discussing ways to make the farm pay, as the profits gradually diminished. Recalls Jessica: 'We looked at everything from spring water production to free-range eggs, a wind farm, a paint-balling centre, farm holidays. But the problem with everything we looked at was that it required a huge outlay with a slow return on your capital.'

They travelled to America to visit a worm farm near San Francisco and were impressed by the fact that the farmer could recycle thousands of tonnes of paper and other waste.

So the Davies returned to Wales and began producing worms for anglers, while still working on the rest of the farm. This mini-pilot scheme minimised risk and allowed them to evaluate the existing demand. If it didn't work out, they could revert to working on the farm as before.

Their initial contract was to supply just 10,000 worms a year, to a company called Vermitech. Such was the demand from anglers that 18 months later the Davies decided that their idea could work. They made another momentous decision - this time that they would turn to worms for their full-time living.

The worm farm had to go into operation on a much larger scale. Alongside the angling business, Jessica Davies set up Evolve Composting, a new company that could process garden waste. All she needed was a large enough supply of waste to make the business worthwhile.

Jessica noted that trouble was brewing for Powys County Council over its landfill site some 15 miles from the Davies' farm. 'It was getting a bad press again in the local paper,' she says.

'People were complaining about pollutants, the smell and the lorries. We thought we could cash in, so we contacted our local councillor and got his support, then we went to the county council.' Powys took the bait and contracted Evolve Composting for a six-month trial.

The initial outlay was about pounds 10,000. The Davies bought two 34-cubic-yard skips, one for garden waste and the other for cardboard, and positioned them in the car parks of two local Safeway stores. The council helped with publicity and with getting support from local councillors, which Jessica says was crucial when Evolve needed planning permission.

The pilot scheme presented a steep learning curve for the Davies. Jessica had to research and find everything, from local hauliers who could transport the two skips to the Davies' farm, to a supplier for the worms.

'It's still livestock husbandry, but obviously very different because we had no experience,' says Jessica. 'But worms still have to be fed and watered every day.' Jessica's skills from her previous job in London proved useful for running the practical side of Evolve - the accounting and secretarial work and sales.

The trial with Powys proved that garden waste could form the basis of a business success. When the pilot scheme ended, Jessica was given planning permission to go full-time. An exemption licence from the Environment Agency permits her to have 1,000 cubic metres of untreated waste at any one time. To treat more waste would cost substantially more in fees and licences. For now, Jessica has decided to stay within her chosen perimeter and not get capital tied up in this way. The only adverse side effect is that she is unable to sell any of the compost she produces.

Since Evolve Composting came into being, the rest of the farm has had to adapt around it. During Evolve's first year, 1,300 ewes were sold off.

This year, the Davies got rid of the pedigree herd of Welsh black cattle, which had been bred on the farm. They had been Richard's particular pride and joy.

'It was a very sad day,' says Jessica. 'For Richard to have to get rid of the Welsh blacks was the worst thing.'

He can take heart from the fact that his own worms-for-anglers business is thriving. It produces half a tonne of worms a week, which sell at pounds 7.50 a kilo. Annual turnover is pounds 150,000, and demand keeps growing.

In addition, the angling worms produce beautiful powder-like casts, which are bagged up and marketed as Black Gold soil conditioner. The Davies are offering Black Gold over their web site and sell both to businesses and to individuals.

The worms that deal with the garden waste are Dendrabeana worms, which can eat their own bodyweight in 24 hours. The Davies 'employ' billions of Dendrabeanas on the farm, each of which lives for between five and 10 years and breed extremely quickly, laying eggs every 10 days.

After the waste is brought to the farm on huge lorries, the real work begins. Everything is hand-sorted. Explains Jessica: 'You'd be amazed at what people put in garden waste skips. There are children's scooters, chicken heads, builders' rubble and old clothes.'

The clean waste is then put through a shredder, which was Jessica's biggest capital investment at the start - an outlay of pounds 27,000 for a second-hand model. Once the waste has been shredded it's left to compost for four weeks before it's deposited on the worm beds.

The recycling beds are several feet high, but they do not rise much, as the waste breaks down and is demolished by the worms. According to Jessica: 'If we put in half a million worms to begin with at the start of a new bed, there will soon be two and a half million worms working for us. They work the surface.' To prove it, she puts her hand into the bed and immediately produces a handful of wriggling worms. It's an unusual workforce, but a productive one.

Evolve Composting now has billions of worms that turn over 3,000 tonnes of waste each year. The company itself turns over pounds 67,000 a year, with profit margins of around 30%. Already Jessica is looking for other sites. She's receiving waste from South Shropshire, and is beginning to find it hard to keep up with demand. Ideally, she'd like to expand to satellite sites, either franchising or charging a percentage per tonne recycled.

From the original loss-making farm, the Davies have created three successful businesses, each of which builds on the natural resources that were available to them. They have retained the farmland and buildings they started with, but have turned them to a new and profitable use. It's proof that even when the best-laid plans go astray, there's often a way to put things right.

IF AT FIRST YOU DON'T SUCCEED ...

- Identify your existing resources, and think of ways in which they might be put to different uses.

- Explore all possible avenues, however outlandish they might seem.

- Be open to opportunity. Jessica Davies stumbled on the idea of a worm farm when she spotted that Powys County Council was receiving a bad press for its landfill site.

- Start small. Begin with a trial scheme that will limit your risks and demonstrate the feasibility of your new business plan.

- Know your limits. Don't get so carried away with early success that you take on too much, too soon.

- Keep on diversifying. The Davies now have three different businesses for the price of one, because they remained open to new ideas.

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